WASHINGTON—The Federal Communications Commission vote to repeal the net neutrality rules is expected by some to have a significant effect on consumers, but any effect on credit unions is far less certain.
Among the questions that will need to be answered is might credit unions that operate in the cloud and use virtual private networks (VPNs) at some point have to pay additional costs?
Two credit union technology experts told CUToday.info the decision by the FCC to dismantle rules regulating the businesses that connect consumers to the Internet, including granting broadband companies power to potentially reshape Americans’ online experiences, won’t go unnoticed by the movement. In varying degrees, based largely on the Internet service providers they use and how a CU manages its data, the decision could be felt in credit union pocketbooks and in the performance of web tools, such as home banking, as certain traffic moves faster online than other traffic.
The FCC has for now scrapped the so called net neutrality regulations that prohibit broadband providers from blocking websites or charging for higher-quality service or certain content. The federal government will also no longer regulate high-speed Internet delivery as if it were a utility, like phone services. The action reversed the agency’s 2015 decision made during the Obama administration, which had argued the issue was about equal access to the Internet.
Ajit Pai, the chairman of the commission, said the rollback of the rules would eventually help consumers, because broadband providers like AT&T and Comcast could offer people a wider variety of service options. Pai was joined in the 3-to-2 vote by his two fellow Republican commissioners.
“We are helping consumers and promoting competition,” Pai said in a speech before the vote. “Broadband providers will have more incentive to build networks, especially to underserved areas.”
The Big Issue Will Be ISPs
Xerex Bueno, CTO at CU Prodigy in Utah, told CUToday.info he believes the impact on credit unions will be small.
“Not all ISPs will leverage this newfound power, if you will, to control the Internet,” said Bueno. “But there will be some providers that will create a fast and a slow lane, which will affect the quality of service you receive. They can get very granular with the type of traffic they allow and how much they allow to go through their networks, particularly for consumers.”
While Bueno expects the credit union impact to be small, what about those that use the cloud to store data or for their core solution?
“At this point in time that is probably not an issue,” said Bueno. “But it is not to say IPSs may not come out with some weird things and say if you want to use VPN traffic, then the credit union would have to pay more or buy some additional package. The ISPs will be able to pick and choose, and they will certainly squeeze the consumer for as much as they can get.”
Where credit unions could feel the change is if they have large numbers of employees accessing the Internet for a particular service. They could see a slowdown in web performance, Bueno said.
Bueno is also concerned for credit unions that host their own home banking and mobile solutions.
“Things of that nature for credit unions could potentially become an issue, but that will all be based on who their ISP is,” said Bueno. “If their ISP wants to throttle or slow down traffic, that could impact home banking and mobile experiences of members whose credit union hosts their own solutions.”
Another Viewpoint
Chad Burney, COO and CIO at $1.9-billion GTE Financial in Tampa, Fla., offered another viewpoint.
“I’m not 100% sure how the decision will impact credit unions,” said Burney. “I do know however, prior to 2015 we didn’t have the regulation, and yet small and large tech firms were still able to innovate without the Internet crashing and burning. So for me, I’m always in favor of deregulation, as I truly believe it allows innovation to flourish. Anytime the government tries to get involved to make the playing field equal, it ends up having the complete opposite effect. Also, the concept of ‘pay to play’ is not new in any industry. I live in Tampa, and here we have several highways, where if people choose to pay a fee, they get to travel on roads with less traffic. So even if removing this regulation causes only the wealthy companies to obtain faster speeds on the internet, I have faith that it would only drive innovation where websites require less performance.”
While the FCC has made its decision, actual implementation is expected to be some time off, as Congress may still act and lawsuits have already been filed in response to the change.